IN THE NEWS - Central America Free Trade Agreement

US Trade
Representative Robert Zoellick, third from left, and Central
American trade dignitaries, reach out to shake hands in
Washington

The United States has signed a
trade agreement with five Central American countries. The five are
Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Trade ministers from the six countries signed the agreement in a
ceremony Friday at the Washington headquarters of the Organization
of American States. The new treaty is known as the Central America
Free Trade Agreement, or CAFTA.

The Dominican Republic is expected to join CAFTA at a later date.
All seven countries will be included in the agreement when it is
presented to the United States Congress for approval.

President Bush first announced his plan to negotiate a free trade
agreement with Central American countries in two-thousand-two. The
negotiations were completed at the end of last year.

CAFTA generally would be an expansion of NAFTA -- the North
American Free Trade Agreement. NAFTA was completed in
nineteen-ninety-four. It links Canada, Mexico and the United States.

The Central America Free Trade Agreement is similar to NAFTA. It
would bring the Bush administration one step closer to its goal of
creating a free trade area. The area would include every country in
the western half of the world, except Cuba. The Bush administration
is hoping to reach an agreement on the Free Trade Area of the
Americas by January two-thousand-five.CAFTA would end taxes on more
than eighty-percent of industrial and other goods exported from the
United States to Central America. It also would cut taxes on more
than fifty-percent of American farm products to Central America.
Taxes on most other goods also would be ended over time.

Most goods from Central America and the Dominican Republic
already enter the United States without taxes or other restrictions.
The Bush administration says the agreement would provide similar
help to American businesses. It says the agreement also would
strengthen trade and investment ties, and create jobs among all the
member nations.

But opponents say CAFTA will harm workers, farmers and the
environment. Labor groups say the agreement would make it more
profitable for American businesses to move jobs to Central America.
Some members of the United States Congress say it fails to protect
American workers from foreign competition. Critics also say it will
weaken labor rules designed to help Central American workers.

The Bush administration says the agreement's labor and
environmental rules extend beyond earlier trade agreements. It says
CAFTA follows trade rules that members of Congress established in
two-thousand-two. Central American nations have criticized the
United States and other industrial nations for failing to fully open
their markets to trade from developing areas.

In the News, in VOA Special English, was written by Cynthia Kirk.
This is Steve Ember.